A patient and intentional growth strategy has seen Aspiriant become one of the largest independent wealth management firms in the US. CEO and Co-Founder Rob Francais shares how his commitment to creating a national service partnership model has established the foundation for scalable, sustainable success.
With 11 offices across the US, Aspiriant has become a significant advice enterprise with over a third of its 220 employees also owning partnership equity in the firm and approximately $14billion assets under management.
This phenomenal growth has been achieved through mergers: one advice business at a time.
The firm’s history stretches back to 2002, when Aspiriant’s CEO and Co-Founder Rob Francais established family office Quintile Wealth Management. But it was in 2008, following Quintile’s merger with wealth management firm Kochis Fitz, that a new model for RIAs (Registered Investment Advisors) was born.
“When we began, we could see a need for a service organisation that focused on the unique needs of affluent families,” explains CEO and Co-Founder Rob Francais. “In the late ‘90s, a lot of money was in motion as long-established family-owned businesses were sold. There were national accounting firms to help with tax advisory and national legal firms to advise on contracts. But no equivalent to guide them on how to manage this new liquid wealth.”
In the US, much like Australia, wealth management firms typically grow organically. One adviser starts serving clients, then hires another as more clients come on board.
“Then one day you wake up aged 60 and think, ‘Now what am I going to do with this business?’” observes Francais.
That’s why he started Aspiriant with a succession plan front and centre.
“We wanted to create a 100% employee-owned partnership model, where we could act as true fiduciaries. That means no product sales for commissions – we need to take full responsibility for achieving client goals. We would remain permanently independent, and leverage our scale to build our client services.”
In the US, RIAs have a fiduciary duty to act in their clients’ best interests - unlike other types of financial advisors in that country.
Cameron Garrett, Head of Macquarie Wealth Solutions says that’s what makes Aspiriant’s model so interesting for growth-oriented Australian wealth management firms to consider.
“We see many different models work well in our industry, and Aspiriant’s is quite distinctive – and clearly very successful,” he says.
Alignment is at the heart of Aspiriant’s model – alignment between the interests of the client, employees and the business owners.
“We’re in the ‘clarity and peace of mind’ business,” says Francais. That’s what his ideal client group, affluent families, is seeking. And it aligns with what talented trusted advisers want too: the opportunity to provide a superior service and value, in a collegial environment with opportunities to advance their career.
This compelling purpose has attracted eight other wealth management firms who wanted to be part of Aspiriant’s story. The enterprise now has more than 1,600 wealth management clients (averaging $7million AUM) and over 100 family office clients (averaging $25 million AUM).
It’s worth noting they’ve done this without any external capital.
“This growth story has been entirely self-financed by reinvesting the profits each year, and that independence has become a point of difference for their client proposition and strategy,” says Garrett. “We’ve visited Aspiriant’s office during several of our Virtual Adviser Network (VAN) Global Innovation Program tours, and participants have been impressed by Rob’s ability to build significant scale without compromising control, or requiring a lot of external capital.”
“Rob had an ambitious vision from day one, and was very clear about the building blocks that needed to be in place to attract the right talent,” he adds. “Every decision his team has made aligns with Macquarie VAN’s four proven business success drivers – especially around planning for sustainable growth and scale from the beginning.”
Garrett believes this focus on creating a model that works in their clients’ best interests will resonate with Australian advisers, given the growing demand for independent advice and integrated services. “Aspiriant’s volume is larger, which drives its adviser compensation model. But every other aspect aligns with the growth levers we share with Australian firms in VAN’s Build for the Future program.”
Francais shared five principles that underpin Aspiriant’s proven, effective model – and why he’s only just getting started.
1. 100% employee owned, from day one
Aspiriant has never had to raise capital. “We just started serving clients, and then revenue less expenses gave us net income to invest back into the business.”
The firm now has 82 equity partners. Several mergers added more than $2.5billion AUM to Aspiriant’s model, injecting significant scale in the process.
“The benefits of this scale accumulate over time,” Francais says.
For employees, that includes career opportunities, diversification of ownership risk and the freedom to move between offices across the country. For the firm, it reduces shared services costs including marketing, technology and finance. Clients also benefit from access to better, more cost effective advice and products – and can have confidence in the continued independence of their advice, as well as the knowledge they’re guided by a significant business.
Francais says that’s why being open about this business model can also bring organic client growth.
“It’s a story we can share with clients. We’re showing them how we’re bringing the next generation of advisers to them, and we’re focused 100% on their happiness and care. They want to be part of that.”
2. Focus on mergers – not acquisitions
Francais says bringing in talent from other firms doesn’t just make Aspiriant bigger.
It also makes it better.
“That’s why we don’t do acquisitions, we do mergers. We could chase a better financial outcome with an acquisition, but it would compromise our long-term strategy,” he explains.
He describes it as the difference between being transactional and being in a relational business. “Our people care about stability, and we like making a difference for people. So there are things we won’t do, even if they might make us more money in the short-run.”
For Aspiriant, mergers allow the team to expand its services, capabilities and culture. “We added a tax department and an estate planning group this way. Now we can create in-house shared services and client service resources,” Francais says.
Mergers also expand Aspiriant’s geographic footprint. For Francais, that decision demands a strategic rationale: what value will it bring for both employees and clients?
“For example, we recently expanded into Austin because we knew our younger partners and employees want to live there – it’s up and coming and more affordable,” he says.
When he meets with a potential new firm, Francais brings an org chart with empty boxes. He says this is his wish list for roles Aspiriant wants to add – such as a training and development capability. His due diligence also weeds out any prospective firms that aren’t fully aligned with Aspiriant’s culture and values.
“Sometimes you get more talent on the client services side from a deal, and sometimes you get more on the shared services. Regardless, in every way it makes us better as an organisation,” he says.
3. Give talent a stake in their future
The 100% employee-owned model is not just a differentiator for clients: it defines Aspiriant’s employee value proposition as well.
“Growth helps us retain talented employees, because they know they have a path to ownership. They can see we’re going places and want to be part of our succession strategy,” explains Francais.
Every partner has the same rights, privileges and obligations of ownership. “Our ownership model has always been opt-in, and once you opt in you’re subject to the same rules as everyone else.”
With a transparent succession strategy, advisers can plan to retire on their terms, knowing they can transition their business to the next generation and realise the value they’ve worked so hard to build.
Francais calls this an ‘engineered succession’ model. It’s deliberate and can be executed at scale. It has also ensured the average age of partners has remained consistent over the past 15 years – the average age of new partners is 38, while Aspiriant partners typically retire aged 66.
